Tesla reports first profitable year after sixth consecutive quarter of earnings

Tesla described last year as a “transformer” for the electric carmaker, reporting on its sixth consecutive quarter of profitability on Wednesday leading to a full year of profitability, giving CEO Elon Musk a win.

The company generated $ 270 million in net profit in the fourth quarter, or $ 0.80 cents per share, slightly below Wall Street estimates of $ 1.03 per share. Revenue came in above estimates of $ 10.7 billion, as the company delivered 180,667 vehicles in the quarter. For the full year, Tesla posted $ 721 million in net income over revenue of $ 31.5 billion.

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Looking ahead, the company has announced ambitious delivery plans.

“Over a period of several years, we expect to achieve an average annual growth of 50% in vehicle deliveries,” said Tesla in a statement. “In a few years we can grow faster, which we hope will be the case in 2021.”

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The average selling price of Tesla vehicles decreased by 11 percent year on year as production shifted from models S and X to models 3 and Y more affordable. Models S and X accounted for 18,966 of total vehicles delivered in the quarter, while Models 3 and Y accounted for 16,701 of total deliveries.

The company previously said it delivered 499,550 vehicles in 2020, slightly below its estimated delivery of half a million vehicles. It produced 509,737 vehicles in the year.

In addition, the company’s gross margins reached 19.2 percent, the lowest since the fourth quarter of 2019. The company also reported positive free cash flow for the year of $ 2.79 billion, while capital expenditures reached $ 1.15 billion.

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During the quarter, Tesla made a series of updates to its facilities.

The Tesla plant in Fremont, California, now includes a new drivetrain, a completely new interior, external upgrades and other improvements. Production on new Models S and X vehicles will resume in the first quarter and increase back to full capacity over time. Tesla also plans to increase Model Y production at the facility, which will include “integrating one-piece castings from the bottom of the body to meet customer demand”.

Meanwhile, Tesla’s Shanghai Gigafactory increased production of the Model 3 to more than 5,000 cars a week and started producing its newest Model Y vehicles. The company recently started shipping the new Model 3 vehicles from the factory to several countries in Europe and the Asia-Pacific region with a “strong response” from customers.

The company also continues “on the way to start producing vehicles this year with structural batteries taking advantage of internal battery technology” at its facilities in Berlin and Austin, Texas, where the company will increase production of the new Models S and X and deliver the first Tesla Semi by the end of the year.

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“While our total market share in Europe increased in 2020, Gigafactory Berlin should allow a significant increase in local deliveries, similar to what we saw after the construction of Gigafactory Shanghai,” said Tesla in his letter to shareholders. “The construction of our factory in Berlin continues as planned.”

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